Appeal of former hot spots dims

Tuesday 10 October 2017

Demand for property in the hot spots which were driving the market has fallen dramatically as the market stays quiet, new data from Realestate.co.nz reveals.

By Miriam Bell

The real estate website’s September data is out and it shows that new listings, total stock and demand are all down across the country.

Nationwide, new property listings in September fell by 11.8% to 9,283, as compared to September 2016.

Just four regions saw an increase in new listings. They were the Wairarapa (up 29.8%), the Central North Island (up 19.3%), Marlborough (up 4.2%) and Canterbury (up 4.0%).

There was also little change in the national average asking price. It is now sitting at $617,971, which is an increase of just 0.3% on the $616,038 recorded in August.

Realestate.co.nz spokesperson Vanessa Taylor said that asking prices have generally remained static in markets around the country.

“Only the Southland, Northland and Marlborough regions registered significant increases in asking prices when compared to last month.”

They recorded a lift in asking prices of 9.6%, 2.6% and 2.4% respectively as compared to August.

Asking prices were flat in six regions. This included Auckland which saw a 0.6% increase that took the average asking price to $938,858.

Of the remaining 10 regions, the West Coast registered the largest fall in asking price compared with the previous month, dropping 8.4% to $280,187.

“In a tight supply environment where there is a shortage of stock, it would be natural for buyers and sellers to assume that asking prices would be more likely to trend upwards,” Taylor said.

“But sellers are tending to be realistic in the current environment, with buyers also in a ‘wait and see mode.”

Realestate.co.nz also measures property demand – by looking at the increase or decrease in the number of views per listing in regions over a rolling three month time frame.

According to this measure, former property market hot spots Auckland, Waikato, Wellington and Bay of Plenty now sit at the bottom of the demand table

The Auckland region took bottom spot on the demand table (-18.6%), with Wellington (-15.7%), Waikato (-14.6%) and the Bay of Plenty (-10.4%), close behind.

New listings in those regions were also down year-on-year.

The Bay of Plenty showed a 21.7% drop in new listings, followed by Auckland (down 17.1%), Wellington (down 13.7%) and the Waikato (down 12.4%).

ASB economist Kim Mundy said the data shows the housing market remains quiet although new listings did increase in September, as compared to August.

However, total inventory continues to creep lower, which could represent sellers withdrawing properties for sale, she said.

“While this is most pronounced in Auckland, seasonally-adjusted weeks of inventory fell for the majority of regions across the country in September.

“This highlights that this is not an Auckland-only phenomenon.”

Mundy said that, despite the slow sales activity, falling inventory levels should help to support prices or limit any further falls in house prices.

“Strong population growth and sluggish housing construction (particularly in Auckland) will support house prices over the coming few years.”

Read more:

Auckland sales fall further 

Quarterly value chill 

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